Ron Conway (SV Angel Founder) – Fast Company Interview (Jan 2022)

Chapters

Abstract

The Ron Conway Effect: Pioneering Angel Investing, Ethical Leadership, and Reshaping Tech’s Landscape

In the dynamic and ever-evolving world of technology and startups, few names resonate as much as Ron Conway. An early angel investor, Conway’s journey began under the mentorship of Don Valentine of Sequoia Capital, leading him to pioneer a unique, founder-centric approach in investing. His strategic focus on internet and crypto ventures, coupled with a deep emphasis on ethical business practices and civic engagement, has not only yielded successful investments like Ask Jeeves, Google, and PayPal but also propelled critical discussions on tackling misinformation in tech and advocating for racial equity in venture capital. This article delves into Conway’s influential career, highlighting his methods, beliefs, and impact on the tech industry and beyond.

1. Early Journey into Angel Investing

Ron Conway’s foray into angel investing was significantly influenced by his relationship with Don Valentine. Despite his own reluctance in management roles, Valentine’s guidance led Conway to recognize his potential in offering strategic advice and support to budding entrepreneurs without the direct management responsibilities. Thirty years ago, after founding and managing three companies, including Altos Computer, Conway embarked on his angel investing career. Inspired by his experience at Altos Computer and his friendship with Valentine, a founder of Sequoia Capital, Conway pursued angel investing, following Valentine’s suggestion to become an angel investor and advise founders without managing them.

2. Strategic Investment Choices: Internet and Crypto

Conway, with a keen eye for emerging technologies, made a deliberate choice to focus his investments on the internet, predicting its exponential growth. He later paralleled this foresight with the nascent crypto industry, identifying and capitalizing on its potential early in its evolution. Conway made a strategic decision to invest in the internet segment, believing it had the potential to explode. He recognized the early potential of the internet and has witnessed its continued growth over the past 30 years. Conway sees crypto as the next internet and is excited to be a part of this emerging industry.

3. SV Angel’s Investment Philosophy

SV Angel, Conway’s investment vehicle, operates with a remarkable strategy of investing in one company per week, showcasing an aggressive yet discerning approach primarily in internet software and crypto sectors. SV Angel invests in one company per week, primarily focusing on internet software and now dabbling in crypto. The firm’s first two unicorns were Ask Jeeves, a pioneer in the search engine industry, and Google, which revolutionized search with its page rank algorithm. Conway acknowledges that unicorns are rare, but SV Angel has been fortunate in identifying successful startups.

4. Identifying Exceptional Founders

Central to Conway’s investment strategy is his uncanny ability to spot visionary leaders. He prioritizes founders who are not only passionate and driven but also possess the ability to articulate and communicate their vision compellingly. Conway believes that successful founders possess a unique combination of characteristics. He emphasizes the importance of founders having a clear vision, a strong work ethic, and the ability to attract and retain top talent. Conway highlights the significance of founders being able to articulate their vision and inspire others to believe in their mission. He acknowledges the challenge of identifying special founders early on, but emphasizes the need for investors to trust their instincts and back founders who they believe in.

5. The Founder-Centric Approach and Handling Failures

Conway’s investment decisions heavily favor the founder’s qualities over the idea itself, emphasizing attributes like problem-solving, determination, and effective communication. SV Angel invests in people first, prioritizing the founder’s traits and abilities over the idea itself. Ron Conway seeks founders who are genuinely passionate about solving practical problems. Enthusiasm and the ability to communicate the vision are crucial factors in a founder’s success. Conway emphasizes the founder’s ability to attract and recruit engineers to join their startup. Founders need to be outgoing and capable of communicating the company’s vision to potential hires. He also holds a supportive stance towards founders who face failures, valuing their ability to learn from mistakes and bounce back. Most startups fail, but Conway admires founders who have the courage to start a company. Failing founders who respond well to setbacks and demonstrate concern for their team are likely to receive continued support. Conway advises founders who realize their company is failing to conduct an orderly shutdown, ensuring that employees are treated fairly. He values ethical behavior and believes that founders who prioritize the well-being of their team are worthy of future investment. Conway views failed founders as individuals who are transitioning to new opportunities. He supports founders who learn from their failures and continue to pursue their entrepreneurial ambitions.

6. Emphasis on Ethics and Civic Engagement

A staunch believer in ethical business practices, Conway advocates for founders who demonstrate niceness and ethical conduct. Nice people make successful founders because they can build strong teams and maintain positive relationships with stakeholders. Conway believes in karma and emphasizes the importance of ethical business practices. He argues that successful companies are led by founders with strong moral and ethical compasses. Conway encourages founders to be aggressive and proactive in business but stresses the need to maintain ethical standards. He believes that leaders who prioritize ethics gain respect from their teams and achieve success faster. He underscores the importance of civic engagement, urging tech leaders to influence policy-making, especially in areas like voting rights and immigration reform. Tech leaders have a responsibility to give back to their communities. Civic engagement is essential for founders and tech leaders. Founders should call their senators and congressmen to advocate for important legislation. The Freedom to Vote Act is crucial for guaranteeing future generations the right to vote. Civic engagement should be bipartisan and humanitarian, not political. Ron Conway has spent time on activism and solving issues in government. He was active in San Francisco addressing tech lash and addressing Donald Trump’s presidency. Conway urges founders to be civically engaged and advocate for important legislation.

7. The Misinformation Challenge in Tech

Addressing the surge of anti-tech sentiment, Conway identifies misinformation as a critical issue plaguing the industry. There is a strong anti-tech sentiment due to concerns about misinformation. Tech companies have not adequately addressed the issue of misinformation. Misinformation has negative consequences, including vaccine hesitancy. To solve the misinformation problem, tech companies and Washington DC need to collaborate. Changes to Section 230 may be necessary to address misinformation. He advocates for collaborative efforts between tech companies and policymakers to tackle this challenge, suggesting that modifications to laws like Section 230 could be instrumental in curbing misinformation.

8. Racial Equity in Venture Capital

In light of the awakening triggered by incidents like George Floyd’s, Conway has emphasized the need for racial equity in venture capital. He supports and mentors funds that focus on investing in founders of color, aiming to foster a more diverse and inclusive startup ecosystem. Conway believes that the tech industry has made significant contributions, creating jobs and solutions. Companies like Airbnb, Uber, and Instacart provide employment opportunities. Misinformation is a major problem that needs to be solved. Conway believes that the tech industry can find a solution to misinformation.

DACA and Voting Rights: A Call to Action for Tech Founders

Ron Conway emphasizes the importance of preserving democracy and addresses the urgency of protecting DACA (Deferred Action for Childhood Arrivals) kids and ensuring their right to stay and work in the United States. Lorene Powell Jobs, the Emerson Collective, and Forward.US are actively involved in advocating for the protection of DACA kids in legislative bills currently under consideration.

Tech founders can play a crucial role in shaping public policy by actively engaging in DACA and voting rights issues. Karina Gupta recognizes the significance of civic engagement, particularly for immigrants like herself, who have benefited from the opportunities provided by the U.S. democracy. Conway highlights the unique influence that tech founders have in Washington, D.C., due to their fascination among legislators. Tech founders’ voices carry significant weight and can influence policy outcomes by leveraging their megaphone. Conway acknowledges the busy schedules of tech founders but encourages them to dedicate a small portion of their time to advocating for important issues. The return on their time invested in civic engagement can be substantial, given their ability to amplify their voices and influence legislative decisions.

Racial Equity in Venture Capital

After the George Floyd incident, there was a widespread awakening in the country regarding racial equity. To address this issue, Ron Conway invested in Slauson & Co., a venture capital fund led by general partners of color. The goal is to invest in founders of color and create opportunities for them to succeed. This systemic solution to racial equity will take time, but it is essential to start now.

Conway emphasizes the need for venture capital funds led by founders and general partners of color to invest in founders of color. He believes this is the key to creating the next Larry Page, Mark Zuckerberg, or Jack Dorsey of color. Slauson & Co. is one example of a venture capital fund working towards this goal. Conway mentors the Slauson & Co. general partners to help them achieve their goals. He is confident that they will find and support the next generation of successful founders of color. The ultimate aim is to build a trillion-dollar company led by founders of color, which would be a significant milestone in addressing racial equity.

Conway’s Legacy and Influence

Ron Conway’s impact on the startup world extends beyond his successful investments. His commitment to ethical business practices, founder support, and civic responsibility shapes a legacy that transcends financial success. His insights on tackling misinformation and advocating for racial equity in venture capital reflect a deep understanding of the broader societal implications of technology. As Conway’s influence continues to permeate the tech industry, his principles and strategies remain pivotal for upcoming entrepreneurs and investors alike.

Notes by: MatrixKarma